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Renowned Pissarro Art Stolen by Nazis at Center of "Choice of Law" Dispute

By Joseph Fawbush, Esq. | Last updated on

In 1939, Lilly Cassirer Neubauer, a Jewish woman, needed to flee Germany with her husband. Nazi officials offered the couple $360 and two exit visas in exchange for the family's prized possession: Camille Pissarro's 1879 oil painting "Rue Saint-Honoré in the Afternoon. Effect of Rain." The Danish-French painter was considered a forerunner of the revolutionary Impressionist movement. As such, his works were prized at the time and continue to be admired today. The couple never received the money but were able leave the country after giving up the masterpiece.

After the war, the painting was smuggled into California. While the original owners thought it had been destroyed in the war, it was secretly still in the U.S. The painting changed hands a few times before Swiss Baron Hans Heinreich Thyssen-Bornemisza bought it for $275,000 in 1976.

The Baron later sold the piece among his 775-piece collection to the Kingdom of Spain in a deal totaling $338 million. The country in return opened the Thyssen-Bornemisza Museo Nacional in his honor, where the painting is still displayed today. The single painting is now worth somewhere between $30 and $40 million.

The Cassirers Rediscover the Painting

In 2001, Claude Cassirer, Lilly's grandson, found the painting after years of searching. He asked the museum to return the work to him, arguing that the painting was stolen and that the museum did not have ownership. Spanish property law, however, provides for "adverse possession" that essentially grants ownership of an item when it has been purchased in good faith and possessed for six uninterrupted years—even if it had previously been stolen. The Spanish government replied that it did not know the Pissarro had been stolen decades ago and had been displaying the painting for eight years at the time. Thus, the country refused to hand it over.

Cassirer filed suit, claiming a violation of California state law under the Foreign Sovereign Immunities Act. The FSIA generally does not allow U.S. courts jurisdiction over sovereign entities. The museum is public and funded by the Spanish government, so under the FSIA, American courts would not have jurisdiction in the matter. However, the statute carves out an exception for "property taken in violation of international law," providing that in such instance "the foreign state shall be liable in the same manner and to the same extent as a private individual under like circumstances."

The procedural posture of the case is extensive. The parties have been in litigation for the last 15 years, making four trips to the 9th Circuit. The Supreme Court denied review twice before finally taking on the case. On Tuesday, January 18, SCOTUS heard oral arguments.

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At Issue: Should California or Spanish Law Apply?

The Supreme Court took up the case of Cassirer v. Thyssen-Bornemisza Collection Foundation to decide whether the 9th Circuit was correct in using federal common law to choose which substantive law applied: California's or Spain's. The merits of the case appear to hinge entirely on the "choice of law" question, as California does not allow thieves to pass good title to anyone, whereas Spain does. But the question of whether to use American or Spanish substantive law is further complicated by whether you're asking California courts or federal courts.

The 9th Circuit Court of Appeals used federal choice of law doctrines to determine that Spanish substantive law applied to the Cassirer case. But the 2nd, 5th, 6th, and D.C. Circuits have held that in actions brought under the FSIA, federal courts should apply state choice of law doctrines. In this case, then, these latter circuit courts would hold that California's state choice of law provisions should be used. This circuit split is likely the reason that Supreme Court finally granted cert.

The SCOTUS justices asked relatively mild questions during oral arguments, although Chief Justice John Roberts did say that adopting the 9th Circuit's approach would put federal appellate courts in the "unusual" position of having to "devise their own body of law." Justice Neil Gorsuch, noting the lengthy procedural history of the case, followed up on this point: "[I]f I were to think that the Chief Justice's line of questioning has some force and that the state law should be the default . . . it might be time to call this one to a close."

If that is any indication of the direction the court will rule, it is good news for the Cassirers, who could potentially be reunited with a precious family heirloom after more than 80 years.

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